Turner v. Prudential Ins. Co. of America

• Decision Date: 18 February 1960
• Docket Number: No. C--1142,C--1142
• Citation: 60 N.J.Super. 175,158 A.2d 441
• Parties: Frank V. L. TURNER, Administrator of the Estate of Charles W. Wells, deceased, Plaintiff, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey Corp., Norman Lonie, Graham Lonie, Sandra Lonie, Charles Wells and Moira Wells, minors, and Margaret E. Wells, Defendants.
• Court: New Jersey Superior Court

Page 175

60 N.J.Super. 175

158 A.2d 441

Frank V. L. TURNER, Administrator of the Estate of Charles W. Wells, deceased, Plaintiff, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey Corp. Norman Lonie, Graham Lonie, Sandra Lonie, Charles Wells and Moira Wells, minors, and Margaret E. Wells, Defendants.

No. C--1142.

Superior Court of New Jersey, Chancery Division.

Feb. 18, 1960.

Frank Sahl, Woodbury, for plaintiff.

George D. Rothermel, Camden, for defendant Prudential Ins. Co. of America.

Edward L. O'Brien, Woodbury, for Thomas Lonie, guardian ad litem for Norman Lonie, Graham Lonie and Sandra Lonie.

Daniel W. Beckley, Woodbury, for Robert H. Schumann, guardian ad litem for Moira Adrienne Wells.

WICK, J.S.C.

On August 17, 1942 the deceased, Charles W. Wells, entered into a contract of life insurance with the Prudential Insurance Company of America. This policy when issued contained the name of his then wife, Helen V. Wells, as sole beneficiary. After their divorce decedent exercised his power to change the beneficiary and on May 11, 1955 named Margaret E. Lonie, fiancee, as the primary beneficiary, and her three children, Sandra Lonie, Graham Lonie and Norman Lonie, as alternate or contingent beneficiaries. The decedent later married Margaret E. Lonie, and thereafter Charles W. Wells, Jr. was born of the union; and the wife was, on the date of death of decedent, Enceinte with child, born subsequently and named Moira Wells. Needless to say, no other change of beneficiary was made, hence this action.

On February 8, 1958 Charles W. Wells died from wounds inflicted by gun shots, for which his wife, Margaret E. Wells, was tried and convicted of murder in the second degree, and for which she is presently confined in prison.

Suit was instituted by plaintiff as administrator of the decedent's estate to secure payment to him of the $5,000 policy. Defendants are the insurance company, the aforesaid five children and the widow. By interpleader on cross-claim the monies have been paid into court and the insurance company discharged. Default has been entered against the widow, the convicted murderess. Guardians Ad litem have been appointed for all children, they being minors.

Plaintiff and the guardian Ad litem for the two children born of the marriage between the deceased and the convicted murderer contend the proceeds should be paid to the administrator. The guardian Ad litem for the three older children born of the previous marriage of the widow and convicted murderer who are the named alternate or contingenet beneficiaries, contends the proceeds should be paid to him, for their exclusive benefit.

The policy of insurance contained this written provision as a beneficiary rider form:

'A beneficiary designated in this rider shall be entitled to payment only if he or she is living at the death of the insured and If there is not then living a beneficiary designated in a prior class.' (Emphasis supplied.)

As stated by Chief Justice Vanderbilt in Neiman v. Hurff, 11 N.J. 55, 60, 93 A.2d 345, 347, (1952):

'To permit the murderer to retain title to the property acquired by his crime as permitted in some states is abhorrent to even the most rudimentary sense of justice. It violates the policy of the common law that no one shall be allowed to profit by his own wrong 'nullus commondum capere protest de injuria sua propria. '' See Merrity v. Prudential Insurance Co., 110 N.J.L. 414, 166 A. 335 (E. & A.1933), and Swavely v. Prudential Insurance Co., 10 N.J.Misc. 1, 157 A. 394 (Sup.Ct.1931).

The same reasoning has been universally declared as one of public policy, that the murderer shall not benefit by his deed either through insurance proceeds or property rights.

The question as to who shall receive said insurance proceeds as between the personal representative of the insured's estate and the alternate beneficiary has led to considerable differences throughout the country, as well as the method of arriving at the conclusion. Other than Neiman v. Hurff, supra, dealing with joint tenancy in real property and joint ownership of stocks, no New Jersey case has been found in point.

In Beck v. West Coast Life Insurance Co., 38 Cal.2d 643, 241 P.2d 544, 26 A.L.R.2d 979 (Sup.Ct.1952), where the policy read 'David Albert Downey--Husband, if living, otherwise to Jettie Knoll--Friend of the Insured,' the court said:

'As between the estate of the insured and the alternative beneficiary there are three possible solutions. It has been held that the absence of any express provision in the policy permitting the alternative beneficiary to take, when the primary beneficiary is still alive requires that the proceeds be paid to the estate of the insured. Beck v. Downey, 9 Cir. 191 F.2d 150, 152. The choice might also be made on the basis of mortality tables and the proceeds paid to the person or persons who would be most likely to take had the murder not been committed. The third solution is to allow the alternative beneficiary to recover the proceeds. Metropolitan Life Ins. Co. v. McDavid, D.C., 39 F.Supp. 228; Neff v. Massachusetts Mutual Life Ins. Co., Ohio Com.Pl., 96 N.E.2d 53, 54--55; United States v. Kwasniewski, D.C., 91 F.Supp. 847, 854; Sharpless v. Grand Lodge, Ancient Order of United Workman, 135 Minn. 35, 37, 159 N.W. 1086, L.R.A.1917B, 670; see 3 Scott on Trusts, 494.1, p. 2407; Costigan, Note, 9 Ill.L.Rev. 505, 509; Wade, Acquisition of Property by Wilfully Killing Another--A Statutory Solution, 49 Harv.L.Rev. 715, 742.

'We have concluded that the third solution should be adopted. Because the beneficiary clause of a life insurance policy in which the insured has reserved the right to change beneficiaries in donative and testamentary in character (cases cited), the intent of the insured as expressed by the language that she used should be given effect so far as possible. * * * Although her expressed intent that her husband receive the proceeds cannot be given effect, the policy names the one she wished to take if her husband could not. It stated that the proceeds should be paid to the alternative beneficiary, if the primary beneficiary predeceased the insured. Thus, in the type of disability that would naturally be anticipated by the insured, the alternative beneficiary was preferred over the estate of the insured. In this case there occurred the only other possible contingency in which the primary beneficiary would be under a disability equivalent to actual death. The insured has clearly indicated her intent that any interest her estate might have in the proceeds of the policy should be subordinate to the interest of the alternative beneficiary. This intent is recognized by a holding that the alternative beneficiary may recover the proceeds. A holding that the estate of the insured is entitled to the proceeds would not only defeat this intent, but would also enable the murderer to deprive the alternative beneficiary of her opportunity to take in preference to the estate by foreclosing the possibility that the murderer might predecease the insured. The rule that prevents his profiting by his own wrong should not be invoked in such a way as to prejudice the rights of the alternative beneficiary. 'In a word, it appears to me that the crime of one person may prevent that person from the assertion of what would otherwise be a right, and may accelerate or beneficially...